Background Malaria remains a significant public health issue in Eastern Indonesia, where multidrug resistant Plasmodium falciparum and Plasmodium vivax are highly prevalent. The objective of this study was to describe treatment-seeking behaviour and household costs prior to a change to a unified treatment policy of dihydroartemisinin-piperaquine in Mimika district, Papua province in 2006. Methods In 2005 a randomized cross-sectional household survey was conducted to collect data on demographics, socio-economic status (SES), treatment-seeking, case management, and household costs. Information on the cost of illness was also collected from patients exiting health facilities, in order to compare the cost of episodes diagnosed as P. vivax compared with those diagnosed as P. falciparum. Results 825 households were included in the survey. Of the 764 individuals who sought treatment for fever outside the home in the last month, 46% (349/764) went to a public health facility. Of the 894 reported visits to healthcare providers, 48% (433) resulted in a blood test, of which 78% (337) were reportedly positive. Only 10% (17/177) of individuals who reported testing positive for P. falciparum or mixed infection received the first-line treatment of chloroquine with SP, and 38% (61/159) of those with a diagnosis of P. vivax reportedly received the first-line treatment of chloroquine and primaquine. Overall, public facilities were more likely to prescribe the correct prevailing first-line drug combinations than private providers (OR = 3.77 [95% CI 2.31–6.14], p < 0.001). The mean cost to the household of an episode of P. vivax was similar to the cost of P. falciparum [US$44.50 (SD: 46.23) vs US$48.58 (SD: 64.65)]. Conclusions Private providers were a popular source of treatment for malaria, but adherence to the national guidelines was low and the economic burden of malaria for both P. falciparum and P. vivax infections was substantial. Engagement with the private sector is needed to ensure that patients have access to affordable good quality, effective diagnostics and anti-malarials for both P. falciparum and P. vivax. Electronic supplementary material The online version of this article (doi:10.1186/s12936-016-1588-8) contains supplementary material, which is available to authorized users.